Question

Question 12
Mr. Ainspan is a college student working on a degree in accounting. He received the following in 2019:
-A $4,000 scholarship used for tuition at State University
-A $1,000 scholarship used for fees and books
-An $8,000 fellowship used for his room and board

Compute the amount Mr. Ainspan must include in income for 2019.

1) $8,000

2) $5,000

3) $13,000

4) $9,000

Question 13
Mr. and Mrs. Garden filed a joint return for 2019. Mr. Garden received $8,000 in Social Security benefits and Mrs. Garden received $4,000. Their income also included $10,000 taxable pension income and interest income of $2,000. What part of their Social Security benefits will be taxable for 2019?

1) $0

2) $6,000

3) $24,000

4) $12,000

Answer 1

Answers:

Q.No.12

Ans. 1) $8000.

   scholarship or fellowship is tax-free if you are a full-time or part-time candidate for a degree at an eligible educational institution. ... So if your scholarship covers tuition as well as room and board, the amount spent on room and board is considered taxable; the amount spent on tuition is not.

Q.No.13

Ans. 1) $0

  If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you must pay income taxes on your Social Security benefits. Below those thresholds, your social security benefits are not taxed.

In other words, For married couples filing jointly, you will pay taxes on up to 50% of your Social Security income if you have a combined income of $32,000 to $44,000.